Signature Global made a strong debut on the bourses today, September 27, 2023. The stock listed at ₹444 on the NSE, a premium of 15.32 percent to the issue price of ₹385. Meanwhile, on the BSE, it listed at ₹445, a 15.58 percent premium.
The ₹730 crore initial public offering (IPO) was open for subscription between September 20 and September 22 with a price range of ₹366-385. The issue includes a sale of fresh equity shares worth ₹600 crore and an offer-for-sale (OFS) of up to 2.7 crore equity shares worth ₹127 crore by the International Finance Corporation (IFC).
The issue was overall subscribed to 12.50 times. The portion for qualified institutional bidders (QIBs) was booked 13.37 times, while the allocation for non-institutional investors saw 14.24 times bidding. The quota reserved for retail investors was subscribed to a little more than 7 times during the bidding process.
The company had reserved 75 percent of the net offer for qualified institutional bidders (QIBs), 15 percent of the offer for non-institutional investors (NIIs) and 10 percent for retail investors.
Incorporated in 2014, Signature Global claims to be the largest real estate development player in the National Capital Region of Delhi (Delhi-NCR) in affordable and lower mid-segment housing, majorly in Gurugram, Ghaziabad and Karnal. It has sold 27,965 residential and commercial units, all located within the Delhi NCR region as of March 2023. Over FY20-23, its pre-sales booking has increased by 98.3 percent CAGR to Rs. 3,430.6 crore in FY23. As of 31st March 2023, the company has sold 25,089 residential units with an average selling price of ₹36 lakh per unit.
For the year ended on March 31, the company reported a net loss of ₹63.7 crore, with consolidated revenue from operations at ₹1,553.6 crore. However, its net loss came in at ₹115.5 crore with a revenue from operations at ₹901.3 crore in the previous financial year.
ICICI Securities, Kotak Mahindra Capital Company and Axis Capital were the lead managers to the issue.
Brokerage firms were mostly positive on the stock and suggested to 'subscribe' to the issue, citing its growth prospects, rising demand of the housing sector in the Delhi-NCR region, and management's target to turn it profitable on a net basis. However, aggressive valuations and the loss-making nature of the business pushed investors backward.